MeadWestvaco swings to profit

Improved prices and product mix boost bottom-line results

By

ChristopherHinton

NEW YORK (MarketWatch) -- MeadWestvaco Corp. said Wednesday it swung to a second-quarter profit on the back of its mill-based packaging business that benefited from increased prices and improved product mix.

For the recent quarter, the Glen Allen, Va., consumer products packaging company said net income was $32 million, or 17 cents a share, up from a loss of $7 million, or 4 cents a share in the same period last year.

Recent second-quarter earnings includes an after-tax charge of $5 million, or 3 cents a share, related after-tax charge for employee separation costs and facility closures, and a one-time cost of $5 million, or 3 cents a share, related to a cost-initiative program.

Excluding one-time items, MeadWestvaco would have earned 23 cents a share, in line with analysts' mean estimate from a poll by Thomson Financial.

Sales for the quarter rose 8.7% to $1.71 billion from $1.57 billion last year.

Shares of MeadWestvaco closed Wednesday at $31.46, down 2.7%. Shares are up about 28% in the last year.

MeadWestvaco
MWV
makes board paper for consumer products packaging, such as toothpaste and soda boxes. The company also produces office and school supplies, and makes the original Trapper Keeper notebook.

MeadWestvaco also has been in the process of selling 300,000 acres of southern timberland that could yield more than $325 million, J.P. Morgan analyst Claudia Shank said in note. Over time, the company is expected to sell around 600,000 acres altogether.

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